The importance of governance for projects, programmes and portfolios in times of crisis

To say it right from the beginning: governance is always important to ensure that projects in the context of an organization are performed successfully. According to ISO 21505 “Project, program and portfolio management — Guidance on governance” the term “governance” can be defined as “principles, policies and framework by which an organization is directed and controlled“.

Who usually exercises governance in an organization? This role is typically performed by specific Governing Bodies or individuals such as executives and senior managers and aims at achieving both, accountability and performance. The governance of respective projects, programmes and portfolios in an organization should be an integral part of the organization’s overall governance (often called “Corporate Governance”). Latter should support and enable the proper management of projects, programmes and portfolios.

Unfortunately, governance and management are all too often confused. ISO 21505 distinguishes the two terms as follows: “Governance authorizes, directs, empowers, provides oversight and limits the actions of management. Management should work within the constraints set by the organization’s governance to achieve the organization’s objectives.”

According to the principle of “Doing the right things and doing them right”, governance should provide guidance on what is important and urgent within the organisation. Especially in times of crisis, it is relevant for an organization not to get confused, to focus on its core competences and to only carry out those activities or projects that bring real value add. The governance takes care for policies, rules and regulations that apply to all activities and projects within the organization and ensures that they are professionally implemented, including appropriate processes, organizational structures with roles and responsibilities. During the corona pandemic, for example, it is particularly important to translate government regulations into a suitable set of rules for one’s own organization and thus also for projects, programmes and portfolios. This currently applies in particular to health care measures, but the regulations also go far beyond this and address financial, tax, labour law and other aspects of the business.

ISO 21505 highlights that the governance of projects, programmes and portfolios should “a) reflect values and principles of the organization or organizations responsible for the projects, programmes and portfolios being governed; b) facilitate achieving the organization’s objectives, while complying with the constraints set by its governance framework; c) consider the cultural and ethical norms of  any other organizations involved and communities in which the organization operates.” In times of crisis, for example, it is important for leadership to be transparent regarding decisions and their implementation in the organization. Furthermore, it is of utmost importance to communicate frequently and in greater detail and to explain the context of certain measures taken.

While in normal working life the rules and regulations of an organisation are implemented rather unconsciously, times of crisis often raise new questions that have not yet been covered. Respective governing body or the executives must therefore also check more often whether these rules and guidelines are still suitable or need to be adjusted. In the times of Covid-19, the management must therefore also deal with the rules and regulations constantly and create clarity for all those involved. If this is not done, uncertainty and disorientation creep in among employees, with unimagined consequences for their personal health and ability to continue the business.

This is also where the importance of resilience comes into play, which I have already highlighted elsewhere, i.e. the ability of an organisation and all those involved to adapt quickly to changes and exogenous crises and to remain effective.

Large organizations usually have a variety of policies, including but not limited to risk and issue management policies; delegations of responsibility and authority; environmental and sustainability policies; health and safety policies. A Code of Ethics and Professional Conduct helps clarifying expectations of internal and external stakeholders towards the behaviour of the organization´s leadership and staff and ultimately serves as a benchmark for an evaluation of respective actions.

ISO 21505 emphasizes three important aspects of the governance of projects, programmes and portfolios: “a) integrating the organization’s values and policies into the governance and management of projects, programmes and portfolios; b) fostering a culture of respect, fairness, trust, honesty, and appropriate transparency and openness; c) supporting the organization’s commitment to sustainability, including economic, environmental and social responsibility.” The latter two are particularly important in a time of crisis, as this is where it becomes particularly apparent whether the aspirations and the reality of leadership in the organization truly fit together.

Author: Reinhard Wagner, CEO of Tiba Management Consulting

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